Clients need tax planning more than ever
As tax professionals, we work with clients from all walks of life, each with unique financial circumstances. Yet nearly all share a common concern: “Do I have enough for retirement, and am I maximizing my tax savings?” It’s a great question, and one they often bring to either their financial advisor or their tax preparer.
While financial advisors may provide insight into investment growth or retirement projections, they often lack the tax expertise needed to optimize savings between now and retirement, or what we refer to as the client’s exit date. This is where tax professionals can step in and add significant value.
We don’t need to replace the financial advisor. But we are in a prime position to guide clients through core tax planning strategies that can have a substantial impact on their financial future. Even the most informed clients often need coaching when it comes to deciding between a traditional IRA and a Roth, understanding 401(k) contribution options, utilizing backdoor Roth conversions, leveraging 529 plans for both children and adults, or contributing to HSAs. Each of these tools, when used strategically, can yield $50,000 to $200,000 in tax savings over time – especially for clients age 50 and up.
There are tools, however, to help visualize and explain these strategies more clearly. When exploring platforms, it’s helpful to look for one that allows professionals to model basic tax planning scenarios and present them in a client-friendly way. Easy-to-read graphs and walkthroughs help clients understand the “why” and “how” of their plan, not just the numbers.
As clients increasingly look to their tax professionals for guidance that extends beyond tax return preparation, offering tax planning isn’t just a value-add; it’s essential. Without it, clients may default to self-preparation or miss opportunities for long-term savings.
Adding planning conversations to your tax services doesn’t require deep financial forecasting, just a willingness to walk clients through the basics and introduce tools that support smarter financial decisions.